Governor hopefuls tout help for small businesses

Editor's note. This is the first in a six-part, weekly series examining key issues in the Missouri governor's race. Future stories will evaluate issues of transportation, civil litigation reform, public education funding, higher education affordability. and taxation.

By Marc Powers

Nevada Daily Mail

JEFFERSON CITY, Mo. -- Both major party candidates for governor promise to emphasize the role of small businesses in their efforts to improve Missouri's economy and create jobs.

Secretary of State Matt Blunt, a Republican, calls for an end to burdensome state regulations that no longer serve a compelling governmental interest and pledges to pursue reform of the state's workers' compensation and unemployment compensation systems.

"The most important thing we can do to make Missouri a better place for small businesses is to change the entrepreneurial climate," Blunt said.

Changes in workers' compensation and unemployment laws are needed to stem abuses in the system that lead to fraudulent claims and are costly to employers, Blunt said. Reform of the judicial system is also needed, he said, to protect companies from baseless "nuisance" lawsuits.

Blunt also says taxes on small businesses should be examined to ensure Missouri isn't putting its companies at a competitive disadvantage with those in other states. He suggests eliminating the state's franchise tax, which companies pay for the right to do business in Missouri.

"It is burdensome and onerous," Blunt says. "You have to pay it regardless of how successful your business is." State Auditor Claire McCaskill, a Democrat, said nurturing existing small businesses and the creation of new ones should be the focus of job creation efforts. The development of smaller companies tends to have a greater overall economic impact than recruiting major corporations that often demand significant taxpayer subsidies in exchange for locating in Missouri.

"In order to land great big new companies, you have to give away the sun, the moon and the stars for years," McCaskill said.

Part of her outreach to small entrepreneurs includes plans to appoint an ombudsman who will help them bust through bureaucratic red tape at the state and local levels when they are trying to establish or expand their companies.

"We are going to have a desk at the Department of Economic Development to help people at that moment when they think government has lost its mind," McCaskill said.

Tax credits have long been a key economic development tool in Missouri. In recent years, however, many of the various tax credit programs have been criticized for failing to create jobs and even for fostering fraud. Both candidates say the tax credit system needs an overhaul.

"Tax credits that are not achieving some sort of societal aim or are not bringing in more money than they cost ought to be phased out," Blunt said.

McCaskill says better cost-benefit analyses of individual credit programs need to be compiled so those that don't work can't be identified and weeded out.

"These are investments on behalf of taxpayers," McCaskill said. "If we can't show the investments are paying off, we shouldn't be doing them." McCaskill says more must be done to ensure that rural business and communities have access to state economic development services. To that end, she intends to have a staff member in the governor's office dedicated to rural economic issues and helping outstate communities identify and access available programs.

"A lot of small communities can't afford to hire lobbyists like the big cities can, so they are shuffled around from agency to agency," McCaskill said.

In recent years, there have been bipartisan calls for making Missouri a national hub for life sciences research and high technology industries. Both candidates say a stronger state investment in higher education is needed to achieve that goal, with the two-fold intent of building the reputation of Missouri universities as research institutions and to produce the highly skilled workforce technology jobs will demand.

"There are good things going on around the life sciences," Blunt said the state just has to be a partner."

Next week: Transportation